Collective global belt-tightening during the economic downturn has led to some creative thinking in terms of innovation – and open innovation is a trend that is here to stay.

So far, major companies like Unilever, Kraft Foods and General Mills have led the way in outsourcing their most perplexing formulation challenges. The big players’ requests for innovation partners are likely to multiply, and 2013 will also see more mid-sized companies dipping their toes in the open innovation pool.

For ingredient companies, keeping up to date on companies’ wants could be a way to bag some big customers, while food manufacturers save costs on in-house R&D and get specialist solutions to market more rapidly. It’s win-win.

Ethics at eye level

Just a few years ago, many businesses were still looking at sustainability as a nice-to-have optional add-on. How times have changed.

Environmental stewardship, animal welfare and fair pay for workers are among conditions of production that consumers now expect – and companies are beginning to realise that ethical business practices are good for the bottom line too. After all, sustainability means continued production tomorrow, while building worker and customer loyalty today.

As more companies draw attention to their ethical production efforts, a virtuous cycle of competitive sustainability initiatives will emerge. And it helps that many of these initiatives will cut costs…

Rising food prices

Food prices are likely to continue their upward trajectory, as smaller grain stockpiles, a growing population, increased demand for animal protein and a changing climate are still causing disruption to the supply/demand balance.

In November, the World Bank said
that without significant change, we will have to get used to a ‘new norm’ of higher food prices. Perhaps collaboration between industry, governments, NGOs and marketeers will happen in the long run, but change won’t come soon enough.

Food taxes and subsidies

Even as prices rise, governments will want to keep an eye on how different food pricing policies – including taxes and subsidies – affect consumption. Across Europe, obesity and related diseases are weighing on public finances, so despite Denmark’s backtracking from its fat tax
last year, taxes will remain on the agenda for many European nations in 2013.

I predict that policy makers will take a broader view of the issue, looking to balance taxes on less healthy foods with subsidies for healthy ones, and assessing the impact of these measures over the long term, in terms of public health spending and tax revenue, as well as quality of life.

Simple ingredients

Health and wellness remain high on consumers’ priority lists in 2013, but the focus has begun to swing away from low numbers (for sugar, fat, salt and calories) in nutrition tables and toward simplicity in ingredient lists. Shunning low-calorie sweeteners for sugar and choosing ‘pure’ fats like butter ahead of fat replacing starches and hydrocolloids may not always be the best choice for the waistline, but shoppers are looking for simple, old-fashioned ingredients with strong associations with good quality.

Naturalness fits well with this trend, and natural colours, flavours and sweeteners will continue their rise, as consumers equate ‘natural’ with ‘healthy’, while still valuing many of the traditional – but formerly artificial – attributes of convenience foods, such as vibrant colours and flavours and intense sweetness without the calories.

It’s a tricky balance to strike, but look out for shorter ingredient lists, as well as more on-pack explanation of why certain ingredients are in there in the first place.

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